Britain’s biggest drugs firm, GlaxoSmithKline, today stormed ahead with its $2.6 billion (£1.6 billion) hostile takeover of US biotech Human Genome Sciences, waving aside the board to take its bid direct to shareholders.
Glaxo is Human Genome’s major partner, working together on Benlysta, the first new lupus drug approved in the US in half a century.
But the biotech last month rejected GSK’s $13-a-share cash offer, which was more than 80% higher than its unaffected closing share price, saying the bid price did “not reflect the value” of HGS.
The US firm instead hired Goldman Sachs and Credit Suisse to launch a strategic review, which included considering putting itself up for sale.
Today, however, GSK showed it wasn’t prepared to wait and took its bid direct to investors, saying its offer was “full and fair”. The drugmaker, headed by Sir Andrew Witty, added: “GSK’s participation in the [review] process is unnecessary as its offer is not conditioned on due diligence or financing and can be completed expeditiously.
“It is important for HGS shareholders to understand that GSK is committed to proceeding with its offer. There is clear strategic and financial logic to this combination and HGS shareholders should have the opportunity to decide for themselves on the merits of the offer.”
Alongside Benlysta, Glaxo and HGS are co-developing two other experimental drugs: darapladib to treat heart disease and type-two diabetes drug albiglutide, which are both also in late-stage trials. Buying Human Genome would give GSK full rights to those drugs.
Glaxo is being advised by Lazard and Morgan Stanley. It said it expects to save at least $200 million in cost synergies from the deal by 2015 and forecasts it would boost earnings by 2013.
Big pharma has embarked on a blitz of deals as it tries to bolster faltering pipelines as blockbuster medicines go off patent.
